This weekly newsletter pulls together summaries of the top ten most-read Insights across Macro and Cross Asset Strategy on Smartkarma.
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1. EA Resilience Is Perfunctory Problem
- Crashing US surveys in 2025 have looked idiosyncratic, as spurious exaggeration of exceptionalism ends. The ESI corroborates the PMI’s resilience in the euro area.
- Price expectations have been trending further above long-run averages without a one-off shock, suggesting European policy is too loose for this stage of the economic cycle.
- EA unemployment remains lower than a year ago, inconsistent with tight monetary conditions. We still see the ECB’s last cut in June, much sooner than the market prices.
2. Warren Buffett’s Increased Stakes in Japanese Trading Houses – Impact on Korean Trading Companies
- In this insight, we discuss how Buffett’s increased stakes in Japanese trading companies could positively impact Korean trading companies.
- In addition, we look back at the past five years and compare how the major Korean trading companies have performed relative to their Japanese counterparts.
- In Korea, we believe that the following 5 major Korean trading companies (POSCO International, Hanwha Corp, LX International, Samsung Corp, and Hyundai Corp) could continue to outperform the market.
3. Steno Signals #186 – The year of the weak USD is upon us
- I wanted to get the German election results before releasing my weekly editorial, and as far as I can judge, we are talking about a middle-of-the-road outcome, which should be seen as a net positive for European assets for now.
- CDU (Conservatives) and SPD (Social Democrats) will be able to form a GroKo (Grand Coalition) with 328 mandates, which is a coalition that could likely find some common ground around spending more and removing the debt brake, at least temporarily.
- A permanent removal of the debt brake will require the backing of an additional party.
4. What Is NPS Buying and Selling in the Korean Stock Market in 2025 So Far?
- KOSPI and KOSDAQ are up 10.2% and 14%, respectively YTD, outperforming S&P 500 is up 2.2% in the same period. so far.
- One of the big drivers of higher share prices of Korean stock market this year has been the strong net buying by the NPS.
- Some of the major stocks that have been net purchased by the NPS so far this year include Samsung Electronics, SK Hynix, LG Energy Solution, Hyundai E&C, and Samsung Biologics.
5. Asian Equities: Asia’s Robust Dividend Yielders
- In today’s uncertain scenario, cash is king. Moreover, the high US treasury yields, which had rendered a dividend yield strategy relatively unattractive, are beginning to decline again.
- In addition to considering today’s dividend yields, we think it’s also imperative to take into account companies’ future earnings potential to assess future dividend stability.
- Screening companies with at least 6% forward dividend yield and 5% forecast EPS CAGR over next 2 years, we arrive at our basket of 23 dividend yielders, 13 from HK/China.
6. Over the Horizon: A Review of Thematic Trends
- Our most prominent theme over the last year has been to BUY HK/China markets. We are still very bullish on these SECULAR BULL markets.
- We have been Bullish on gold and discussed the asymmetry of its price movements given the global tightening starting in 2021/22. Gold will continues to benefit from negative real rates.
- We have been Bearish on Japan since publishing Technically Speaking: Japan Meets Resistance and Hong Kong Finally Breaks Downtrend on April 2, 2024. We also remain bearish on India.
7. The Other Risk to World Trade: China’s Mercantilism
- While America’s restrictions threaten the global trading order, China’s outdated, export-reliant model is culpable, too. In exporting its overcapacity, China behaves like a small, open economy, but it is not.
- Given its size, China’s export surges produce outsized effects, triggering protectionist responses. China’s friends in the Global South are scrambling to defend their domestic industries, and not just the West.
- Until China finds a way to recycle its surpluses into investments in other countries, trading partners will suffer the downsides of import competition without any offsets, thus worsening trade tensions.
8. The Week Ahead – Risk Sentiment Intact, For Now
- Peace hopes are higher and tariff fears have subsided for now
- China hosting summit with tech entrepreneurs could boost economy
- Markets becoming complacent over Trump’s policies, uncertainty remains on future developments
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.
9. Here Are My Top Macro Ideas
- The first 5 weeks of the year have seen international equities outperforming the S&P 500: European and Chinese stocks have rallied harder than US stock indexes, and certain emerging markets like Chile or Poland are doing even better.
- My main thesis for the first half of the year remains to be positioned with an ‘’International Risk Parity’’ portfolio: long US bonds, and long stocks around the world.
The chart above shows that the US growth exceptionalism might be over. The Aggregate Income Growth series is a great proxy for nominal growth in real time: it includes private sector job creation, workweek hours, and wage growth – effectively reflecting the growth rate of nominal income US workers are bringing home.
10. The Case for Europe
- Europe is outperforming the US in terms of stock market performance this year
- Valuations in the US are high, while Europe is trading at a historic discount
- Expectations for US companies are high, while Europe’s expectations are low, leading to potential momentum shifts between the two regions
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.
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This weekly newsletter pulls together summaries of the top ten most-read Insights across Equity Derivatives on Smartkarma.
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1. Alibaba (9988 HK): How Options Traders Are Navigating the Rally and Volatility. Top Trades.
- This Insight analyses Alibaba Group Holding (9988 HK) tailor-made option strategies traded over the last five trading days on the Hong Kong Exchange. Strategy highlights and volatility context are provided.
- These traders tailor structures to risk budgets and take calculated bets. Several large box trades appeared on the ticker.
- Expect more movement on Alibaba Group Holding (9988 HK)‘s Q3 earnings announcement tomorrow, 20 February 2025. Option-implied move at the end of this Insight.
2. Alibaba – How to Position Post Earnings Amid Sticky Volatility
- Alibaba had a super charged move this week, risking 14.56% on its earnings release.
- We look at how price movement and volatility evolve in the month after earnings releases.
- Recommendations are made on how to position through options in this environment of enhanced volatility.
3. NIFTY Poised to Reignite Its Uptrend, But Faces Short-Term Obstacles
- It has been a 5-months journey for the NIFTY Index (NIFTY INDEX) , from its last peak in September 2024, to its current lows.
- Our WEEKLY model indicates a (mildly) OVERSOLD state (Friday at Close, 22929). If the index pulls back a bit more, it’s a BUY but keep reading…
- Our tactical short-term model has found limited upside for the NIFTY at the moment, so the long-waited restart of the uptrend may be a bit bumpy.
4. HSI Index Options Weekly (Feb 17-21): Alibaba Reignites Momentum
- The scorching rally continues with Alibaba saving a lackluster week with huge earnings driven move on Friday.
- Implied vols are in the 85th percentile and struggling to move higher with spot.
- Third week in a row where Call volume as a percent of total slipped indicating that buying fatigue might be setting in.
5. Xiaomi (1810 HK) – Riding the Wave. How Option Traders Navigate. Top Trades Analyzed.
- This Insight analyses Xiaomi Corp (1810 HK) tailor-made option strategies traded over the last five trading days on the Hong Kong Exchange. Strategy highlights and volatility context are provided.
- These traders tailor structures to risk budgets and take calculated bets. Strategies are mostly bullish, and exclusively long volatility despite implied volatility in its 98th percentile.
- Call spreads can indicate where bullish traders expect the rally, driven by its own momentum, to peak. One trade suggests a ceiling of 70 by mid-year.
6. Kospi Index Options Weekly (February 10 – 14): Call Volumes Rebound
- Very low volatility rally with Kospi up 2.63% but still 7% below the 52-week high.
- Implied vols moving in opposition to the rally, dropping 1 point on the week.
- Call volumes rebounded significantly with the most active Call strike trading more than twice as much as the most active Put strike.
7. HSCEI Index Options Weekly (Feb 17-21): Implied Vol Weak Despite Rally
- HSCEI sets a new 52-week high, helped in part by the large earnings related move from Alibaba to finish the week.
- Implied vol struggling to keep up with the rally in spot, dropping 3 points despite Friday’s furious rally.
- We show how the relationship between spot and vol over the past month has not been the norm compared to the previous year’s activity.
8. KOSPI 200 – Upcoming BOK Rate Decision: Navigating Market Moves and Profit Opportunities
- The Bank of Korea is expected to cut interest rates to 2.75% on 25 February 2025. The decision, however, is not expected to be unanimous and some analysts argue against.
- Historical data from 120 BoK announcements and subsequent moves in the Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX EQUITY) is examined.
- Options market pricing seems to lean toward a “surprise and no-change” outcome. Traders can seek opportunities with short straddles or long puts depending on anticipated outcomes.
9. Hong Kong Single Stock Options Weekly (February 17 – 21): Option Volumes Surge as Rally Narrows
- Mixed bag with narrowing participation, widening distribution of returns but with the highest total option volume since November.
- Option volumes over the past 2 weeks are 80% higher than the prior 3-month average.
- Implied vols weaker across the board with 9 of 11 sectors seeing softer implieds.
10. Nikkei Index Options Weekly (Feb 17 – 21): USD/JPY at Inflection Point
- The 150 level on USD/JPY seems to be an area of heightened interest. We see potential for greater disparity of Nikkei returns below this level.
- Nikkei 1-month implied vol is at the 17th percentile; while not currently monetizing, caution is warranted on short vol positions as USD/JPY vol trends higher.
- Call volume dropped sharply vs total volume, with Puts outpacing Calls every day this week.
This weekly newsletter pulls together summaries of the top ten most-read Insights across Tech Hardware and Semiconductor on Smartkarma.
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1. Taiwan Tech Weekly: TSMC & Broadcom Exploring Intel Acquisition — Implications
- TSMC & Broadcom Exploring Intel Acquisitions; Potential Major Consolidation in the Foundry Space
- Taiwan AI Server Leader Expanding to Texas with New Production Hub
- Semi WFE Revenues Increase ~7% YoY In 2024. 2025 Looks Much The Same. So, Where’s The AI Effect?
2. Intel. What’s Really Going On?
- Carving out IFS & taking it private is the most likely outcome for Intel. However, it’s complicated by the SCIP deals and restrictions attached to the CHIPS money.
- Intel Products Group most likely stays with Intel, maintaining the iconic brand and doubling down on efficiency and innovation. I don’t think it gets sold.
- TSMC is unlikely to have any technical role in a spun out Intel Foundry due to a myriad of reasons including monopoly, conflict of interest, insufficient bandwidth etc.
3. Taiwan Dual-Listings Monitor: TSMC Premium Eases Down; Massive Change in UMC Headroom
- TSMC: +22.2% Premium; Wait for Higher Level Before Fresh Short of Spread
- UMC: 0% Premium (Parity) — Massive Increase in ADR Headroom
- ChipMOS: +0.5% Premium; Wait for More Extreme Levels; Earnings Ahead
4. Himax Sees Chinese Automakers Far Ahead in Adopting Touch Displays; CoPackaged Optics Key for AI/HPC
- Himax 4Q24 Results Show Auto Display Surge — Structural Growth Story Visible with Touch Panel Usage in Vehicles Soaring
- China vs. the Rest of the World: Who’s Moving Faster? China Automakers Far Ahead in Display Sophistication
- Himax on Co-Packaged Optics (CPO) — A Critical New Technology for AI and HPC Processing
5. Semi WFE Revenues Increase ~7% YoY In 2024. 2025 Looks Much The Same. So, Where’s The AI Effect?
- Q424 revenues for the top 5 WFE players amounted to $28.7 billion, up 10% QoQ and up 21.7% YoY and an all time record high quarterly revenue for the segment
- For the full year 2024, revenues amounted to $99.74 billion, up 7% sequentially, and slightly exceeding our forecasted 5% growth.
- WFE growth in 2025 will be similar to 2024, with slowing China spending coupled with historic over capacity across the industry countering anticipated AI & technology transition related increases
6. TSMC (2330.TT; TSM.US): Will TSMC Work on Intel Foundry Services? There Are Three Paradoxes…
- It is a paradox US President wanted to make the US the number one semiconductor manufacturing country but is very likely unable to change the existing environment in the US.
- Another paradox is that a foreign company must obtain approval from the relevant US authorities before transferring control of the specific US company, which may not be feasible.
- It raises the third paradox that a Taiwanese company would need to operate an existing US entity with their company’s expertise under different cost conditions.
7. Screen Holdings (7735 JP): 25%+ Upside Potential
- FY Mar-25 guidance has been raised again after strong 3Q results. Growth should continue next fiscal year with rising demand from TSMC.
- Sales to Chinese customers bounced back strongly last quarter, defying predictions. Capacity adds and process upgrades should continue to drive demand from China.
- FPD, PCB and printing equipment are now profitable and should remain so. More efficient production and slower growth in depreciation should also support the operating margin.
This weekly newsletter pulls together summaries of the top ten most-read Insights across Equity Capital Markets on Smartkarma.
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1. Goodman Group (GMG AU) – Big Placement, Big Index Flow But…
- After a minor “disaster” in a secondary placement in December, this morning industrial/infrastructure (including data centres) REIT/etc Goodman Group (GMG AU) announced results and an A$4bn primary offering.
- The large offering comes at a 6.9% discount, and For a combination of reasons, there is a LOT of buying to do with index tracking over the next short while.
- But that too has complications. Some is immediate. Some a little delayed. A bunch may be supplied by short sellers. There is one easy trade. A few more complicated.
2. Sony To Sell Down SRE Holdings (2980 JP) Block – AI-Related Growth Stock Should See Support
- SRE Holdings Corp (2980 JP) does a business in AI Cloud&Consulting for the real estate, finance, and Life & Healthcare business. Sony Corp (6758 JP) is selling a stake.
- The offering is for about US$50mm assuming a 10% discount today’s close. It is not clear how much this was expected but there is a decent-sized short position.
- The stock has its ups and downs, and recently decided it liked Q3 earnings and guidance. That bodes well for the offering.
3. JX Advance Metals Pre-IPO – The Positives – Transforming
- JX Advance Metal’s (JXAM) parent, ENEOS Holdings (5020 JP), is looking to raise around US$2.6bn via selling more than half of its stake in JXAM in its Japan IPO.
- JXAM engages in business activities primarily focused on the development, manufacture and sale of materials made from copper and rare metals, which are used in the semiconductor and ICT fields.
- In this note, we talk about the positive aspects of the deal.
4. Goodman Group Placement – Large Deal, Doesn’t Seem Well Flagged, Not Particularly Exciting
- Goodman Group (GMG AU) is looking to raise around US$2.5bn to partly fund its data centre expansion plans.
- Goodman’s shares have performed exceptionally well over the past year, driven by its pivot towards data centers.
- In this note, we will talk about the placement and run the deal through our ECM framework.
5. JX Advance Metals Pre-IPO – The Negatives – Isn’t There Yet
- JX Advance Metal’s (JXAM) parent, ENEOS Holdings (5020 JP), is looking to raise around US$2.6bn via selling more than half of its stake in JXAM in its Japan IPO.
- JXAM engages in business activities primarily focused on the development, manufacture and sale of materials made from copper and rare metals, which are used in the semiconductor and ICT fields.
- In this note, we talk about the not-so-positive aspects of the deal.
6. JX Advanced Metals (5016 JP) IPO: The Bull Case
- JX Advanced Metals (5016 JP) is a global leader in the semiconductor and ICT materials sector. It is seeking to raise up to US$2.6 billion.
- JXAM is a wholly owned subsidiary of ENEOS Holdings (5020 JP). After the listing, it is expected to become an equity-method affiliate of ENEOS.
- The bull case rests on its leading market position, focus businesses’ improving performance, improving profitability, shift to cash generation, and low leverage.
7. MIXUE Group IPO: The Leading Player that Justifies a Premium
- Mixue Group (MIX HK) has a whopping market share of 32.7% in 2023, based on number of cups sold. It also has the highest profit in the sector.
- With a strong profit record and net cash, it is a leader that captures industry growth. Its extensive network targets low-tier cities’ potential and the franchise model drives expansion.
- It justifies trading on a premium to sector average PER of 19.6x for FY25. If aligning P/B with ROE on the best-fit line, it should be priced at 5.1x pre-money.
8. Sotetsu Holdings (9003) – Crossholders Sell Down – Big ADV Multiple, Low Earnings Multiple, Boring
- Sotetsu Holdings (9003 JP) today announced a large-ish secondary equity offering – 10% of shares out and 20% of Max Real World Float.
- This is crossholders selling down roughly 30% of what they own. Sotetsu announced a buyback for a quarter of the offering over the next six months.
- The shareholder structure and distribution within Max Real World Float tells you all you need to know.
9. Tsumura (4540 JP) Equity Offering – Easy To Swallow, and Not Expensive
- Tsumura & Co (4540 JP) shocked everyone a year ago when they announced an immediate large price hike across the board for its kampo medicines. The stock was +35% immediately.
- It did not fall back. Now the stock is up 60% from a year ago and earnings are too. It’s still <10x PER. Now we get a ¥10bn secondary offering.
- It’s 12 days of ADV but not super heavy, and there is a buyback on the back end.
10. Hexaware Technologies IPO Trading – Very Strong Anchor, Very Poor Overall
- Hexaware Technologies raised around US$1bn in its India IPO, while its anchor book was strong, overall coverage was not.
- Hexaware is a global digital and technology services company with AI at its core, delivering innovative solutions that help customers in their digital transformation journey and subsequent operations.
- We have covered various aspects of the deal in our previous note. In this note, we will talk about the demand and trading dynamics.
This weekly newsletter pulls together summaries of the top ten most-read Insights across Event-Driven and Index Rebalance on Smartkarma.
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1. Goodman Group (GMG AU): Much Bigger Index Impact of US$2.5bn Equity Offering
- Goodman Group went into a trading halt and then announced results and an underwritten equity placement of A$4bn (US$2.54bn) to pursue growth opportunities across logistics and data center operations.
- The stock has dropped since CIC’s stake sale in December but still continues to handily outperform peers.
- There will be some passive buying in the stock at the time of share settlement and more a few days later to mop up around 37% of the offering.
2. Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for March
- Post market close on Friday, Hang Seng Indexes will announce the changes for the Hang Seng Index (HSI INDEX) that will be implemented at the close on 7 March.
- With no constituent changes, one-way turnover will be 2.75% with 3 stocks being capped downward. This gives the index committee the opportunity to add more stocks without significantly increasing turnover.
- The return of the high and medium probability inclusions has matched the performance of the Hang Seng Index over the last few months, Shorts have climbed in some names.
3. Alibaba (9988 HK): Results This Week; Over US$1bn Passive Selling in 3 Weeks
- Alibaba Group Holding (9988 HK) stock has rallied bigly over the last month and has gained 55% over that period.
- That has led to Alibaba‘s weight in the HSI INDEX, HSCEI INDEX, HSTECH INDEX and HSIII Index rising above the cap of 8%/12% and passives will sell on 7 March.
- We estimate passive trackers will need to sell US$1.2bn of stock due to capping. Shorts have been increasing, and quarterly results will be announced on 20 February.
4. India: March Rebalance Announcement Tomorrow; Round-Trip Trade Over US$2.5bn
- The Index Maintenance Sub-Committee of NSE Indices will meet on 21 February to conduct a semi-annual and quarterly review of stocks in various Nifty equity indices.
- The changes will be announced after market close tomorrow and will be implemented at the close of trading on 28 March.
- Based on the forecast index changes and capping changes for a few indices, the round-trip trade will be over US$2.5bn and many stocks will have over 0.5x ADV to trade.
5. [Quiddity Index Feb25] Nikkei 225 Mar Rebal: 2 or 3 IN, 2 or 3 OUT, ~$3bn 1-Way, 1 Squeeze.
- The data observation period is done. No rank changes in the top candidates since mid-Jan. Capping for Fast Retailing (9983 JP) is confirmed.
- For me, it is 2 or 3 ADDs, depending. Kokusai Electric (6525 JP) is still tops. BayCurrent Consulting (6532 JP) second. Shift Inc (3697 JP) third.
- Kokusai is +26.7% in 5 weeks since I wrote bullishly, despite news/confirmation of getting the boot from a global index at end-Feb. Baycurrent is +39.7% (link). Now we count flows.
6. Tam Jai (2217 HK): Toridoll (3397 JP)’s Scheme Privatisation at HK$1.58
- Tam Jai International (2217 HK) announced a scheme privatisation offer from TORIDOLL Holdings Corporation (3397 JP) at HK$1.58 per share, a 75.6% premium to the last close price.
- The key condition is the scheme approved by at least 75% disinterested shareholders (<10% disinterested shareholders rejection). No disinterested shareholder holds a blocking stake.
- The offer price is final. While 53% below the IPO price, the offer is attractive compared to peer multiples and historical trading ranges. This is a done deal.
7. MV Australia Equal Weight Index Rebalance Preview: Potential Changes in March; Multiple Overlaps
- With 6 days left to review cutoff, there are 2 potential adds and 3 potential deletions for the MV Australia Equal Weight Index at the March rebalance.
- Even if there are no constituent changes, capping changes will lead to one-way turnover of 3% and a round-trip trade of A$159m.
- The final list of inclusions/exclusions will depend on price movements till next Friday and whether the provider makes any significant changes to the free float of stocks in the universe.
8. Tam Jai (2217 HK): Toridoll (3397 JP)’s Excellent Offer
- After Tam Jai (2217 HK) was suspended, in Tam Jai (2217 HK) Suspended: Expect Toridoll (3397 JP) To Make An Offer I expected an Offer from TORIDOLL Holdings (3397 JP).
- I also thought an Offer price ~HK$1.50/share would be welcome, but wasn’t hopeful. We got both – a Scheme from Toridoll at HK$1.58/share (best & final).
- Clean deal. Just a question of timing. Docs may be delayed to incorporate FY25E (Mar Y/E) financials.
9. CVC Extends Macromill (3978) Bid and Invites Two Funds To Reinvest – More Interesting Than You Think
- Today, the closing date of the Tender Offer for Macromill, Inc (3978 JP) by CVC saw the tender offer extended by an extra 10 days with new news.
- Price had been declared final. One very large shareholder had said they would not tender. Two more were negotiating. Those two will now tender and reinvest in the back end.
- This does not mean the tender offer is a done deal, but it is worth examining.
10. JIC Launches Shinko (6967) Deal At ¥5,920/Share
- Today quite late, the JIC Consortium announced the launch of the Shinko Electric Industries (6967 JP) Tender Offer expected “mid-February”. Price is still ¥5,920/share.
- This is basically going to be all arbs and passive now. And arbs gonna arb.
- Congrats if you bought the lows in late November early December. Great trade. Congrats if you bought the last delay dip. Now we can all go home.
This weekly newsletter pulls together summaries of the top ten most-read Insights across Tech Hardware and Semiconductor on Smartkarma.
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1. Taiwan Tech Weekly: OpenAI Developing Alternative to Nvidia with TSMC; Hon Hai Guides Strong 1Q25E
- OpenAI Joins the AI Chip Race — Partnering with TSMC and Broadcom to Reduce Nvidia Reliance
- TSMC January Revenue Rises 35.9% — But Reduces 1Q25E Expectations Due to Quake Impact
- Hon Hai Guides for 1Q25E Growth to Be Above Average and ‘Strong’
2. Taiwan Dual-Listings Monitor: TSMC Spread Back to Extremes; ChipMOS Still High
- TSMC: +24.7% Premium; Can Consider Shorting the Spread At Current Level
- ASE: +2.6% Premium; Wait for Closer to Parity Before Going Long Again
- ChipMOS: +1.8% Premium; Can Continue to Consider Shorting at Current Level
3. SMIC (981.HK): Revenue Growth Decelerated in 4Q24, and Growth Momentum to Be Regained in 1Q25.
- SMIC’s 1Q25 guidance is for revenue to increase by 6% to 8% QoQ, and the gross margin to range from 19% to 21%.
- Client revenue contribution from China/Europe/US has changed from 80.8%/15.7%/3.5% in 4Q23 to 89.1%/8.9%/2% in 4Q24. These numbers indicate that SMIC is gradually becoming independent from Europe and the US.
- SMIC’s guidance for the year 2025 is that revenue growth is expected to be higher than the industry average in the same markets.
4. SMIC (SEHK: 00981, SSE STAR MARKET: 688981): Risky to Chase Strength
- Media reports of a sharp decline in profit linked to trade tensions are not correct. Gross, operating and total net profit all increased from 1Q to 4Q of 2024.
- Management’s guidance for 1Q of 2025 has sales growth accelerating to 6% to 8% and the gross margin remaining relatively high at 19% to 21%. This looks reasonable.
- But the shares are near their all-time high and too expensive to chase given the potential negative impact of President Trump’s trade policy. Take profits.
5. Global Semiconductor Sales Hit Record High Of $627.6 Billion in 2024. Where To Now?
- Global semiconductor sales reached a all time record high of $627.6 billion in 2024, an increase of 19.1% YoY, details here:
- As anticipated, semi sales eased off in December 2024, reaching $57.0 billion, a decrease of 1.2% MoM but still up 17% YoY.
- WSTS is forecasting 11.2% growth in 2025. Based on the planned ~40% increase in Mag7 CapEx, we think this is too low and needs to be revised upward to >15%
6. ASEH (3711.TT; ASX.US): A Seasonal Decline in 1Q25, But US BIS Policy Will Help ASEH Business.
- 4Q24 IC ATM sales recorded NT$162bn, up 1% QoQ, GM: 16.4%, down 0.1% QoQ. EMS sales were NT$74.9bn, down 1% QoQ mainly due to seasonality.
- 1Q25 EMS sales will decline slightly YoY, and OPM is down 0.13ppts YoY. IC-ATM sales will decline mid-single-digits QoQ and GM is down slightly more than 1% QoQ.
- Believes it will bring upside from new US BIS policy to ban non-listed OSAT vendors (especially China vendors) to produce US-related chip, but can’t quantify at this moment.
7. Novatek (3034.TT): The Outlook 1Q25 Is Showing Surprising Upside Due to the China Subsidy Program.
- US-China trade war has led to tariff uncertainties. China’s subsidy program has stimulated pre-purchasing by customers in 1Q25, resulting in increased demand for televisions, tablets, phones, and IT products.
- All three major product lines have shown seasonal growth. which LDDI has shown the largest growth, SoC follows closely, and SMDDI has lower growth.
- DeepSeek will accelerate the implementation and popularization of AI applications, benefiting the company.
8. Novatek (3034.TT): Earthquake Affecting 1Q25 Outlook; Benefited by Subsidies for China’s Electronics
- The 1Q25 outlook is expected to see a 0-5% decline quarter-over-quarter due to the recent earthquake in southern Taiwan.
- Factors such as increased demand related to Apple (AAPL US) iPhone production and subsidies for China’s electronics industry are expected to boost Novatek’s output in 1Q25.
- US President Donald Trump has expressed dissatisfaction with Taiwan’s increasing dominance in the semiconductor manufacturing sector.
This weekly newsletter pulls together summaries of the top ten most-read Insights across Equity Capital Markets on Smartkarma.
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1. Japan Eyewear (5889) – “Second IPO” Equity Offering Creates TOPIX Inclusion
- Janaghan Jeyakumar, CFA has had Japan Eyewear Holdings (5889 JP) on his watchlist. He wrote on 6 Feb 2025 in his TOPIX Who Is Ready piece he expected Q1 inclusion.
- He also noted that an equity offering might be required. Monday, we got a forecast revision (upward) for the year ended 31 January, an equity offering, and TOPIX inclusion.
- The equity offering proposed is large enough one could consider it a “Second IPO”. This matters in terms of absorption and in thinking about the TOPIX Inclusion event.
2. CATL IPO Listing in Hong Kong Preview
- Contemporary Amperex Technology (CATL) is getting ready to complete its IPO on the Hong Kong exchange. CATL is expected to raise at least US$5 billion.
- CATL maintained its 36.8% share in the global EV battery market in 2023 and January to November 2024. CATL has excellent fundamentals and improving profit margins.
- Major risk factors include additional tariffs by the US, recent addition to Pentagon’s blacklist, declining sales in 2024, and lower government subsidies for EVs globally.
3. CATL A/H Listing – IPO Filing Updates
- Contemporary Amperex Technology (CATL), one of the world’s largest battery solutions providers, aims to raise at least US$5bn in its H-share listing.
- CATL is the global leader in new energy vehicle battery solutions, in China and globally, as per SNE Research. Its A-shares have been listed since 2018.
- We have looked at the company’s past performance in our earlier notes. In this note, we talk about updates from its most recent filings.
4. Takasago Thermal Engineering Offering (1969) – Small Start to Larger Unwind
- Takasago Thermal Engineering (1969 JP) reported Q3 earnings today. Revs up tiny yoy over 9m. OP +13%, Net +18.2%. Progression a bit behind guidance for full-year (but guidance unchanged)
- Orders received and carried forward a record high. Margins up. DX/etc investments up. Crossholdings down but still HUGE outbound/in-bound. Goal is to shrink from 20% of net assets to 15%.
- Today the company announced some crossholders would sell ~5% of shares out, and the company would launch a buyback for half that. Meh…
5. Daiichi Sankyo Placement – Momentum Is Weak but the Deal Is Small
- Mizuho Bank is looking to raise US$151m from selling some of its stake in Daiichi Sankyo (4568 JP).
- While the deal shouldn’t come as a surprise, given the ongoing cross-shareholding unwind narrative in Japan, the timing of such a selldown isn’t always certain.
- In this note, we will talk about the placement and run the deal through our ECM framework.
6. MIXUE Pre-IPO – Refiling Updates – Slower Growth but Better Margins
- Mixue Group is looking to raise about US$1bn in its upcoming Hong Kong IPO.
- MIXUE Group (MIXUE) is a freshly-made drinks company providing affordable products to consumers, including freshly-made fruit drinks, tea, ice cream and coffee, typically priced at around one USD per item.
- In our earlier notes, we have looked at the past performance, undertaken a peer comparison and spoken about valuations. In this note, we talk about updates from its recent filings.
7. Hexaware Technologies IPO – Not Cheap on Its Own, but Peers Are Trading a Lot Higher
- Hexaware Technologies (HEXW IN) is looking to raise US$1bn from its India IPO.
- Hexaware is a global digital and technology services company with AI at its core, delivering innovative solutions that help customers in their digital transformation journey and subsequent operations.
- In this note, we discuss its RHP updates, undertake a peer comparison and share our thoughts on valuation.
8. Hexaware Technologies IPO: Valuation Insights
- Hexaware Technologies (HEXW IN), an Indian mid-sized global IT services company, aims to raise up to US$1.0 billion.
- We previously discussed the IPO in Hexaware Technologies IPO: The Bull Case and Hexaware Technologies IPO: The Bear Case.
- Our valuation analysis suggests that the IPO price range of Rs674-708 per share is attractive. Therefore, we would participate in the IPO.
9. Guming Holdings IPO Trading – Strong Retail Demand, with Decent Coverage on the Insti Tranche
- Guming Holdings (1364 HK) raised US$233m in its Hong Kong IPO. Guming Holdings (Guming) sells freshly-made beverages in China.
- Guming Holdings (Guming) sells freshly-made beverages in China. Guming focuses on the mid-priced freshly-made tea beverage market with product prices typically ranging between RMB10-18.
- We have covered various aspects of the deal in our previous note. In this note, we will talk about the demand and trading dynamics.
10. ECM Weekly (10th Feb 2025) – Haitian, Guming, LG CNS, Dr Agarwal, Ola, Brainbees, Kaynes, Whirlpool
- Aequitas Research’s weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
- On the IPO front, neither of the two listings performed last week, while more are lining up to list across the region.
- On the placements front, given the ongoing earnings season there weren’t any deals. We did look at lockups and other possible upcoming deals.
This weekly newsletter pulls together summaries of the top ten most-read Insights across Event-Driven and Index Rebalance on Smartkarma.
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1. 7&I (3382) – In Limbo, Dipping, But Stories Coming Together
- In the past month we have seen Seven & I Holdings (3382 JP) earnings, confirmation of the York Holdings timeline, stories about Apollo, KKR, and CP Group providing MBO financing.
- We’ve also seen Itochu confirm the financing request from the Ito family, and two American banks tapped to provide LBO financing.
- York Holdings itself gets created this month, and a buyer decided “in spring” with a Group Buyer/Outcome possibly decided by the May AGM. Looks skewed to me.
2. Japan: Last Look at Potential Passive Selling in February
- There are 14 Japanese stocks at risk of being deleted from global passive portfolios in February. The number will be smaller depending on the day of the review period chosen.
- Selling from passive trackers will range from US$176m-354m and the impact ranges from 3.1-18.4 days of ADV. Short interest has increased in nearly all stocks over the last 4 weeks.
- The forecast deletes have underperformed the TSE Tokyo Price Index TOPIX on average over the last 1-3 months, while there has been marginal outperformance over the last week or two.
3. China/HK: Passive Activity Expected Later This Month
- There could be up to 10 adds/ 29 deletes for the China global index in February. The actual number of changes will be smaller depending on the review date chosen.
- The flow on the forecast adds varies from US$17.5m-US$175m (0.05x-15x ADV) while the flow on the forecast deletes varies from US$14.4m-US$100.4m (0.25x-22.75x ADV).
- Bestechnic Shanghai (688608 CH) is a potential inclusion to multiple indices in June and there will be much larger passive flows to the stock then.
4. Australia: Last Look at Potential Passive Selling in February
- There are 6 stocks in Australia that could be deleted from global passive portfolios later this month, though the probability of deletion varies across the stocks.
- If deleted, passive trackers will need to sell between US$234m-330m in the stocks. Impact is high at between 7-23 days of ADV.
- The potential deletions have underperformed the S&P/ASX 200 (AS51 INDEX) over nearly every time period from 1 week to 3 months. Shorts have increased on all stocks recently.
5. NIFTY NEXT50 Index Rebalance Preview: Final List of Potential Changes in March
- With the review period now complete, there could be 7 changes (including 2 migrations) for the NSE Nifty Next 50 Index (NIFTYJR INDEX) in March.
- Bajaj Housing Finance (BHF IN) and Swiggy (SWIGGY IN) are a hair’s breadth apart on market cap and only one of them could be added to the index.
- With quantitative criteria now being used to add stocks to the F&O segment, it is possible there is no change to the index methodology to limit inclusion to F&O members.
6. Kaonavi (4435 JP) – Small HR Software Co Gets 121% Premium LBO from Carlyle
- Another Japanese smallcap takeover at a huge premium. Must be a day ending in “y.” It is a thing recently.
- Interestingly, this is NOT an MBO. It is an LBO. Carlyle is buying out Kaonavi Inc (4435 JP) at ¥4,380/share which is 19x book and 89x EBIT. Nice price.
- I expect this gets done easily because the co-CEO with 28.7% and Recruit with 20.6% are putting in. There’s another easy 9.7%. One more holder and this is done.
7. S&P/NZX Index Rebalance Preview: Couple of Changes in March
- There could be one constituent change each for the NZX10 Index and the NZX50 Index/ NZX50 Portfolio Index in March.
- The flows are limited but the impacts are huge, and the stocks could move ahead of the announcement of the changes.
- A2 Milk Co Ltd (ATM NZ) is a potential inclusion to the NZX10 Index, but the inflows will be completely overshadowed by the potential deletion from a global index.
8. Taiwan Top 50 ETF Rebalance Preview: Eva Air (2618 TT) Winging Its Way In
- Eva Airways (2618 TT) is forecast to be added to the Yuanta/P-Shares Taiwan Top 50 ETF in March, replacing Formosa Chemicals & Fibre (1326 TT).
- Passive trackers will have 1 day of ADV to buy in Eva Airways (2618 TT) and over 3 days of ADV to sell in Formosa Chemicals & Fibre (1326 TT).
- Positioning on Eva Airways (2618 TT) does not appear excessive while Formosa Chemicals & Fibre (1326 TT) seems to be oversold.
9. SBI Sumishin NetBank (7163) – Oops! NTT Docomo May Not Be There As a Buyer
- On Friday, SBI Sumishin Net Bank (7163 JP) fell 12.5% in the last 90 minutes of trading. This was not due to their Q3 earnings release (out 30 January).
- It seemed due to investor disappointment in the content of the NTT earnings call. As discussed in the forked insight, there had been speculation NTT would buy SBI Sumishin.
- Investors had thought NTT would pay more than 28x earnings and a ¥600bn premium to book to buy the business. At 23.7x Mar25e EPS and 4.1x book, it’s still expensive.
10. Nifty IT Index Rebalance Preview: Oracle Financial Services Could Replace L&T Tech
- Oracle Financial Services (OFSS IN) could replace L&T Technology Services Limited (LTTS IN) in the Nifty IT Index (NSEIT INDEX) at the March rebalance.
- L&T Technology Services Limited (LTTS IN) will also be excluded from the F&O segment at the close on 27 March, so there could be some interesting dynamics at play.
- Passive trackers will need to trade between 0.5-0.6x ADV in the stock. The impact in terms of delivery volume increases to 1.6-2.2x.